Income Taxes (Tables)

11 Months Ended

Jan. 01, 2016

The provision for income taxes related to continuing operations for the 11-month period ended January 1, 2016, and years ended January 30, 2015, and January 31, 2014, included the following:



	11 Months Ended		12 Months Ended
	January 1, 2016		January 30, 2015			January 31, 2014
	(in millions)
Current:
Federal and foreign	$	71	$	16		$	32
State	14		(6		)	13
Deferred:
Federal and foreign	20		26			(28		)
State	7		11			(13		)
Total	$	112	$	47		$	4

Schedule of Reconciliation of Provision for Income Taxes

A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate to income from continuing operations before income taxes for the 11-month period ended January 1, 2016, and years ended January 30, 2015, and January 31, 2014, follows:



	11 Months Ended			12 Months Ended
	January 1, 2016			January 30, 2015			January 31, 2014
	(dollars in millions)
Amount computed at the statutory federal income tax rate (35%)	$	124		$	(99	)	$	31
State income taxes, net of federal tax benefit	14			3			—
Taxable conversion of subsidiary	—			(116		)	—
Change in valuation allowance for deferred tax assets	(21		)	105			—
Change in accruals for uncertain tax positions	(4		)	2			(5		)
Research and development credits	(4		)	(4		)	(3		)
Dividends paid to employee stock ownership plan	(3		)	(4		)	(22		)
U.S. manufacturing activity benefit	—			—			(3		)
Non-deductible penalties	—			—			4
Non-deductible goodwill	—			156			—
Other	6			4			2
Total	$	112		$	47		$	4
Effective income tax rate	31.5		%	(16.6		)%	4.5		%

Schedule of Deferred Tax Assets (Liabilities)

Deferred income taxes are recorded for differences in the basis of assets and liabilities for financial reporting purposes and tax reporting purposes. Deferred tax (liabilities) assets were comprised of the following:



	January 1, 2016			January 30, 2015
	(in millions)
Accrued vacation and bonuses	$	45		$	44
Investments	3			3
Deferred compensation	39			39
Vesting stock awards	21			28
Credits and net operating losses carryovers	15			9
Employee benefit contributions	—			4
Capital loss carryover	91			113
Reserves	31			41
Deferred rent and tenant allowances	14			15
Other	13			15
Total deferred tax assets	272			311
Valuation allowance	(102		)	(120		)
Deferred tax assets, net of valuation allowance	170			191

Deferred revenue	(36		)	(47		)
Fixed asset basis differences	(1		)	—
Purchased intangible assets	(138		)	(121		)
Partnership interest	(11		)	(10		)
Employee benefit contributions	(1		)	—
Other	(9		)	(8		)
Total deferred tax liabilities	(196		)	(186		)
Net deferred tax (liabilities) assets	$	(26	)	$	5

Schedule of Net Deferred Tax Assets

Net deferred tax (liabilities) assets were as follows:



	January 1, 2016			January 30, 2015
	(in millions)
Net current deferred tax assets	$	—		$	12
Net non-current deferred tax assets	8			14
Net non-current deferred tax liabilities	(34		)	(21		)
Total net deferred tax (liabilities) assets	$	(26	)	$	5

Schedule of Changes in Unrecognized Tax Benefits

The changes in the unrecognized tax benefits, excluding accrued interest and penalties, were as follows:



	11 Months Ended			12 Months Ended
	January 1, 2016			January 30, 2015			January 31, 2014
	(in millions)
Unrecognized tax benefits at beginning of year	$	17		$	14		$	21
Additions for tax positions related to current year	5			2			—
Additions for tax positions related to prior years	4			11			2
Reductions for tax positions related to prior years	(15		)	(5		)	—
Settlements with taxing authorities	—			(1		)	—
Lapse of statute of limitations	—			(4		)	(9		)
Unrecognized tax benefits at end of year	$	11		$	17		$	14
Unrecognized tax benefits that, if recognized, would affect the effective income tax rate	$	7		$	5		$	6